job creators

Hostess Executives Teach Us All A Little Lesson About Personal Responsibility

dead twinkieToday is really a red-letter day for corporate malfeasance and incompetence here at Wonkette, isn’t it? It is! And such a day wouldn’t be complete without a discussion of the Hostess CEO, whose corporate “maneuvers” might “deprive” workers of some of their pension money by using it for “operations.” (This is corporate speak for saying that the CEOs padded executive pay by stealing money from worker pensions.)

According to a report by the Wall Street Journal, Hostess’ CEO, Gregory Rayburn, essentially admitted that his company stole employee pension money and put it toward CEO and senior executive pay (aka “operations”). While this isn’t technically illegal, it’s another sleazy theft by Hostess executives – who’ve paid themselves handsomely while running their company into the ground. Just last month, a judge agreed to let Hostess executives suck another $1.8 million out of the bankrupt company to pay bonuses to CEOs.

Let us pause for a moment to note that this is not technically illegal. It seems like something that SHOULD be illegal, probably, and something that WOULD be illegal if done in reverse (i.e. workers taking executive pay in order to subsidize their own pensions) but then again, that would be Class Warfare so maybe it shouldn’t be illegal. Also too, it was because of an accounting mistake. Everyone makes mistakes right? Of course they do. Just a little mistake involving a couple zeros, nothing to get too pissy about.

…Back in 2005 Hostess sent out a letter saying they’d just had a very, very profitable quarter.  Their stock jumped up. The CEO, Charles Sullivan, and many of the senior executives sold chunks of their stock.

[...]

Then, a few weeks later in 2005, came the letter saying that, oops, all of that profit had really been just an accounting error – the company was actually in trouble.  Although the CEO and the top guys had all made a nice killing selling the stock when it was high, and paying a maximum income tax on it of 15 percent because they used the Capital Gains loophole that Mitt Romney used to become a multimillionaire, they now wanted the workers to take a big pay cut.

And they DID take a big paycut, while executive pay soared, and while executives “borrowed” from the workers’ self-funded pensions.

Also, if the CEOs shorted the stock in anticipation of that second letter, they made an EVEN BIGGER KILLING, which again, is probably technically not illegal. Or maybe is illegal, but without any real consequences, making it de facto not illegal, because these are JOB CREATORS we are talking about. Also the CEO wasn’t there when it happened, so it’s not his fault probably, he says.

You know, when we were young and naive, we thought that the people got paid lots of money — like CEOs, for example — got paid lots of money because they were ultimately responsible for everything. Apparently it is the total opposite, and they are responsible for and beholden to nothing. After all, they have the gold so they make the rules.

[Alternet]

About the author

Kris E. Benson writes about politics for Wonkette and is pursuing a doctorate in philosophy. This will come in handy for when they finally open that philosophy factory in the next town over. @Kris_E_Benson

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122 comments

      1. Callyson

        Ah, so he *is* going to run for president, then. Wonder if he'll go third party when the wingnuts refuse to nominate him…

  1. CrunchyKnee

    Snark aside, one key lesson that my crunchy knees have learned from being in corporate America for 15 years is that the more one gets paid, the less one does.

  2. nounverb911

    Maybe next year the Texas State Fair could serve deep-fried Hostess’ CEO Gregory Rayburns instead of deep-fried Twinkies.

  3. OneYieldRegular

    Hostess executives' feet will look particularly nice this holiday season encased in a giant Twinkie (made of cement).

    1. gullywompr

      I know, right? It's like CEOs are parading past us in those little skirts and high heels, just asking for it.

  4. Bluestem

    If by some weird happenstance these alleged "persons" are prosecuted, they'll be able to mount the Twinkie defense.

  5. noodlesalad

    It's only class warfare when it's being done to the rich. When it's being done to the poor, it's the invisible magickal market forces.

  6. Not_So_Much

    Pay the pension fund in Twinkies. They have a longer shelf life than the Poors do who weren't ambitious enough to become the CEO and fuck everybody else.

    I'm all about solutions.

  7. coolhandnuke

    Quite a sweet executive business model they confected…the Hostess with the mostest. Let's hope their severance package includes diabetes and a few missing toes.

  8. Goonemeritus

    As a slightly less evil business guy I go to bed each night and ask the baby Jesus to send someone to save Capitalism from itself.

    1. gullywompr

      Who do you think writes the laws? No, it's not the legislators, they just pass 'em (hint: it's the lobbyists).

    2. actor212

      OK, short answer, it's not really, but…

      Longer answer: If a company can claim it has overfunded its pension pool (which are supposed to be held in trust) it can "borrow" the surplus, leaving an IOU in its place.

      Unfortunately, if they, um, make a mistake, that IOU becomes a general liability of the company and will only be funded to the tune of pennies on the dollar after a bankruptcy.

      And the beauty? The shortfall has to be funded by the Pension Benefit Guaranty Corporation, which is a quasi-public company (think FDIC) and that money comes out of….ta-da! your pocket.

      All this requires is a CPA with less ethics than a crack whore.

      1. jello_mold

        Do they even go through the motions of teaching ethics at B-school?

        Bad memories: I had a former "employer" (Cal grad, CPA, MBA Wharton) tell me that because I worked at a startup, I shouldn't expect to get paid. When I took him to the Labor Board he said at the hearing I was killing his dream and he might have to sell one of his houses.

          1. jello_mold

            Oh, the hearing officer didn't think much of his argument and he lost. The hearing officer's distain went right over the ex-boss's head. How dare the board find in favor of me! He sure was a contemptuous asshole all around.

            I just don't get these upper upper middle class toadies' thinking. What do they think us poorz are, airetairians?

            I swear these fucks think slavery is a viable business plan. It's just that the word "slavery" is SO tacky.

      2. Tundra Grifter

        For a few years during one of the recent stock market booms, many companies were reporting "profits" that consisted entirely of underfunding employee pension plans.

        Because those plans have assets "marked to market" and use "market assumptions" in good years the actuaries can project rapid growth.

        Of course, when reality sets in…well, what do you expect when reality sets in?

  9. BigSkullF*ckingDog

    Outrage overload. Can't. Take. Anymore.
    JEYF&^8OJUGHked^8^^&*FY9PQ3487OJIKDFMG'ALIERN 0Q349UTJP3Q ALSO, TOO.

      1. BigSkullF*ckingDog

        If you could find some CEO types being, at a minimum, pilloried that would be great. Drawn and quartered would be better. Roasted slowly over coals would be best.

        1. Isyaignert

          I've always been fond of the classics, like tar and feathering, then the stockades where the 98% throw rotten eggs and tomatoes at them, followed by being run out of town.

          However, having just watched "Trading Places" for the 35th time (it's my Christmas movie), where Eddie Murphy says, "The best way to get back at rich people is by turning them into poor people" and then at the end where the lovely island girl says when offered shrimp or cracked crab for lunch and says, "Can't we have both?" Yes, I want these mofos shamed AND poor.

  10. Lionel[redacted]Esq

    Well, since FOX News has spent the last two days covering an idiot contributor of theirs and Breitbart being punched by a guy he threw to the ground, I'm sure they will be given similar coverage to this side of the labor debate. They are fair and balanced, after all.

          1. glasspusher

            I can do this all day, pal. I used to work at National Starch and Chemical Corporation…they invented the Cool Ranch flavor for Doritos when I was there (shudder).

  11. Allmighty_Manos

    Get a clue. If old people have a decent pension who is going to greet us at Walmart or mop up gas station bathrooms? Hostess is just keeping our economy running as a whole.

  12. Callyson

    accounting error

    In other words, "oh shit–we thought we could get away with it, but they're on to us. What to say, what to say…"

  13. DahBoner

    It's only called stealing when rich people are victims.

    When you steal from the non-rich, that's just GOOD BIDNESS…

  14. Botlrokit

    This is the most delightful part about these assholes: It's on their resume now.

    So you have experience in management, eh? What titles have you held?

    Chief Operations Officer.

    Tell me about your education.

    I received an MBA from Harvard University Graduate School of Business in 1998, with undergrad work at Princeton; that was a BA in Comparative Literature in 1992. Graduated summa cum laude from Harvard.

    And for what company did you serve as COO?

    Ding-Dongs.

  15. ManchuCandidate

    Seriously folks, this has been happening for decades. Ever since Raygun dropped pension requirements in US Amercia corps.

    When a CEO and his buttlickers get their bonuses and the money for stock options where does it come from? Not the actual operations budget because that would be stupid. They get their bonus cash from the big bucket of pension money that hasn't been vested yet. Then they turn around and cry that they need to increase the cost of health insurance, copays, and cut back on your pay increases.

    It's all legal.

    Of course, this is why the CEOs shrieked like crazy when in 94 accountants wanted to change the rules to account for these monies. A few bucks to the proto Teabagger Newty Toot led GOPers and voila! No accounting changes. If the changes had gone through then everyone would realize that the profits (and pension money) was going to execubots.

  16. Antispandex

    Maybe this is why Public Employee pensions are so unpopular? I mean you konw your boss is going to fuck you out of yours, so why should ANYONE get one! I mean, it's only fair, amiright?

    1. GeneralLerong

      How do we turn them into Pigs In Blankets?

      There has to be a way to roast these motherfuckers, now that burning pyres are so 16th century.

  17. smellypossum

    Sitting here at work attempting to invent a Hostess-inspired equivalent of waterboarding: Twinkieboarding. Must be something befitting these pension-plundering assholes…

    I am SO not good at inventing torture techniques.

    1. HistoriCat

      Forced feeding – endless Twinkies … and when they can't take anymore? You scoop that mess up and feed it to them again.

    2. shelwood46

      Cremefilling. Just shove one of those creme injectors in their mouth and turn it on until they pay the pension money back.

      Uh, with votes.

  18. BigSkullF*ckingDog

    The CEO of my company makes around 10x my salary. With annual bonuses maybe makes that 12-14 times. Should I hug him next time I see him?

  19. valthemus

    Stock manipulation, a little pension fund raiding… whatever. But now, they've taken away our snack cakes… it will be their LAST mistake!!

    "… I am going to ask you some questions. And every time you don't give me answers, I'm gonna cut something off. And I promise you, they will be things that you will miss!"

  20. notanncoulter

    It's finally sinking in… why I spend so many days just plain pissed off and disheartened.
    Oh for fuck's sake will this shit NEVER stop?!

  21. StealthMuslin

    It's wrong to wish people dead. It's wrong to wish people dead. It's wrong to wish people dead…

    1. GeneralLerong

      But it's not wrong to wish them wrung like sponges, sent to federal prison, impoverished and living below an underpass when they get outta the pen, is it?

      Now just how to we get that done?

  22. Spider-Jerk

    What are some specific changes that would have to take place to make shit like this not happen? There had to be some sort of regulations or laws in place at some time to prevent this.

    1. GeneralLerong

      I'm guessing federal prison sentences would have to be involved. Also confiscation of assets, right down to the little diamond pinky ring.

  23. HistoriCat

    You know, I could take care of this problem in a day. If only I could find a good deal on some pikes …

  24. Tundra Grifter

    So Executive Management used the workers' pension monies to run the company (and pay their own bloated compensation) and the workers never thanked them for it?

    How ungrateful!

  25. pdiddycornchips

    That unions caused the death of the Twinkie is embedded now in our Corporate Media hard drives. Nothing to the contrary can be true no matter how factual. It has been decided. Unions are greedy and CEO's are paid well 'cause they are super special people. Sometimes they do illegal things but we cannot treat them like criminals. They are special.

  26. Walkinwiddaking

    It must be some airy poundage if you can get that many old guys together and dead lift a Twinkie.

  27. fuflans

    you know, i'm beginning to think the free market is mostly a chimera intended to conceal the fact that rich people are often pricks intent on proving there's a sucker born every moment.

  28. LadyWisdom

    Dear Wonkette please stop linking to subscription articles at the Wall Street Journal. It gives Rupert Murdoch page clicks but unless you subscribe they won't let you read the article. They win, we get nothing.

    Thank you.

  29. Zombie_Reagan

    So it wasn't union thugs looting their own pension fund? You could knock me over with a feather.

Comments are closed.